CERC asked PTC to revise power purchase agreements.
Central Electricity Regulatory Commission (CERC) has pulled up PTC India Ltd, the largest power trader, for delaying action on the former’s order to revise power purchase agreements (PPAs) had signed breaching the 4 paise cap on traders’ margin.
The Commission had asked PTC India in December last year to rectify its PPAs with utilities in eastern India by charging only the allowed 4p margin on the power sold to them.
In a notice issued earlier this month, the regulator said, “The directions of the commission have not been complied with, even though more than six months have elapsed. The respondent (PTC) is directed to show cause why penalty under section 142 of the Electricity Act be not imposed on it.”
PTC India has an agreement to buy power from the 336 Mw Chukha and the 60 Mw Kuricchu hydro projects in Bhutan and sell it to power utilities in eastern India.
This was the first case of a breach of the trading margin regulations and came to light in September last year. Upon analysing PTC India’s quarterly reports, the commission found it had been charging a trading margin of 5p per unit (KWh) for the power purchased by it from the two hydro stations in Bhutan and selling it to utilities in eastern India.
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Earlier this year, PTC had gone to the Appellate Tribunal for Electricity (ATE) and the Supreme Court, seeking a stay on the regulator’s order. It mainly argued that international trade is not within CERC’s jurisdiction and thus its trading margin regulations do not apply in the case.
CERC however maintained that the definition of ‘trading’ as contained in the Electricity Act does not specify that the transactions of power must be within geographical limits and that “the electricity imported from outside and sold within the country cannot be left out”.
PTC now says it will charge trading margin as per the regulations of CERC after its petitions were dismissed. “This (reduction in margin by 1p) would not affect us at all. Our effective margin is already around 3p from the two projects,” said a senior official from the company.
PTC India accounts for over 45 per cent of the total power traded in the country. Around 3-4 per cent of the country’s generated electrcity is traded in the market.